Tag Archives: business expansion

Is it Time for a Second Location?

Growth and expansion are natural goals for most business owners. At some point, you’ll want to take things to the next level. But is it time for a second location? It’s wise to ask yourself a few key questions before taking the plunge.

 

Has your primary location reached its full potential?

Some business owners jump the gun and launch a second location without their flagship store ever truly reaching its peak. This is problematic because you may give less attention to your main moneymaker, which ultimately hurts your company as a whole.

Ideally, your primary location will have reached at least 80 percent of its potential before moving onto a second location. You’ll want things to be operating nearly flawlessly to minimize any painful setbacks.

 

Is your business model replicable?

Many business owners have experienced unbridled success at their first location only to fail at their second. To warrant the opening of a second location, your current business must be replicable. You’ll want to know for certain that you can duplicate the positive results you’ve seen initially.

Perhaps the most integral aspect of duplicating your business is having sound leadership at your second location. You can’t be at two places at once, so other managers will need to step up to the plate.

 

Is there enough demand for a second location?

Perform plenty of market research to gauge just how receptive consumers are likely to be to a second location. Will the projected revenue justify the additional investment, marketing, maintenance and overhead costs?

Be particularly diligent with your market research if you’re branching out to an entirely new city. Demand can fluctuate considerably depending on the locale.

 

Do you have adequate cash flow?

Cash flow is essential for getting things started out on the right foot. If you’re already struggling financially, it’s going to be an uphill battle the entire way. Ideally, stay away from partnering with outside investors and spending other peoples’ money because things can get messy in a hurry and diminish your long-term profit margin.

According to Jennifer Martin, principal consultant at Zest Business Consulting, “The ideal scenario for funding a second location is paying for it yourself.” But if you have to get outside funding, she suggests asking yourself whether you would invest that much in someone else’s business.

“Calculate your success rate thoroughly,” Martin advises, “then add 35 percent to whatever figure you come up with, because no matter how diligently you crunch the numbers, you will always have unexpected expenses.”

 

Are you prepared for the inevitable growing pains?

There are bound to be some curveballs with any type of business venture. It’s inevitable. Make sure that you’re prepared to handle any issues that come your way without them sabotaging either your flagship or second location.

Opening a second location definitely makes sense under certain circumstances and is the logical next step for building your brand. Just make sure that you think it all through before proceeding.

 

6 Ways to Grow Your Business

Congratulations if you’ve been fortunate enough to survive the startup stages of your business! You’ve made it further than a lot of other business owners ever will. But what comes next? There are several different ways to grow your business and take things to the next level.

 

1. Form a Key Partnership

Businesses are constantly partnering with one another in ways that are mutually beneficial. Just think of Apple and IBM, Spotify and Starbucks, UNICEF and Target — the list goes on.

One means of rapid expansion is to find a key partnership that serves as a symbiotic relationship to both parties. Hint: It doesn’t necessarily have to be with a company in your same industry.

 

2. Try a New Marketing Strategy

The great thing about marketing is the endless number of possibilities and combinations. Try experimenting with a new marketing medium if you’re looking to reel in a larger portion of your demographic.

Here are some of the top digital marketing trends for 2017, according to Smart Insights:

  • Content marketing
  • Mobile marketing
  • Conversion rate optimization
  • SEO
  • Online PR
  • Communities

 

3. Open a Second Location

Is your brick-and-mortar business swamped with customers day in and day out? Is it getting congested to the point where it’s hurting the customer experience?

If so, you should definitely consider opening a second location. Of course this requires an investment and will come with some intrinsic growing pains. But the payoff can be huge. Just be sure that you have a definite means of getting financing and carefully consider the optimal locale.

 

4. Add a New Product/Service

If you’ve had good results with your existing product or service, you may want to take a stab at offering another. This could complement something that’s already popular or could strike out in an entirely new direction. The important thing is that it genuinely fulfills the needs of your built-in demographic.

Be sure to perform plenty of market research to gauge receptiveness and develop a plan for raising awareness. For more on a successful launch, consult this resource from Kissmetrics.

 

5. Franchise Your Business

Do you have a system in place that’s successful and replicable? If so, there’s always the possibility of franchising it. When done correctly, this can be extremely lucrative because you’ll A) earn an ongoing royalty and B) build even more brand equity.

The only issue is that you need to ensure that you protect your intellectual property and choose franchisees that will be assets, not liabilities. This post from Forbes will give you a rundown on the basics involved with franchising if you’re interested in going this route.

 

6. Go International

In some cases, partnering with a foreign distributor makes sense. If your product/service has flourished domestically, why not take it to a global market? Just look for potential business partners out of the country. LinkedIn is a great resource for this.

Growth is the goal of most business owners. Experimenting with one or a combination of these ideas can be your ticket to expansion without the growing pains.